Social Grants CrisisTesting the powers of South Africa's Constitutional Court

WORDS Pierre de Vos

South Africa’s Constitutional Court is once again being asked to deal with a highly politically charged matter that affects the government of the country. The last time was over the question of President Jacob Zuma’s failure to repay state money spent on his personal homestead at Nkandla. This time the government’s Minister for Social Development, Bathabile Dlamini, is at the centre of a storm over the payment of 17 million social grants. The contract to do this was given to an independent contractor whose contract expires on March 31. The court ruled in 2013 that the contract was illegal because of tender irregularities and ordered the minister in 2014to make alternative arrangements. She failed to do so and instead has sought to renew the contract. Politics and Society Editor Thabo Leshilo asked Constitutional court expert Pierre de Vos to explain.

Why is this case before the constitutional court?

The case is before the Constitutional Court because civil society organisations – the Black Sash and Freedom under Law among them – approached the court to ask it to intervene in the matter to ensure, first, that grants will be paid after April 1st.

Second, they want to make sure that Cash Paymaster Services (CPS), the private company contracted to pay out social grants on behalf of the government’s Department of Social Development, will not abuse its position to exploit grant recipients. Specifically, they want the company not to use the information it has about social grants recipients to push all kinds of financial products on them. These products include funeral policies and micro loans.

Third, the civil society organisations want to get the Constitutional Court to oversee the grants payment process to ensure that the South African Social Security Agency (Sassa) and CPS don’t enter into a new contract with terms that will allow CPS to make exorbitant profits. Sassa administers the application, approval and payment of social grants in the country.

As the original contract was declared invalid by the Constitutional Court in 2013, because of an unlawful tender process, and because entering into a new contract with CPS would almost certainly be unlawful because the requisite tender procedures were not followed, it’s important for the Court to validate the new contract to legalise the process. If it fails to do that the grants might still be paid on 1 April, but not in a legally valid manner.

What big legal issues are at stake?

The first issue is: what powers does the Constitutional Court have to fix a situation where the only way to deliver social grants – which the state is obliged to do because of a constitutional obligation – would be through a process that, without court validation, would be unlawful and invalid.

The second legal question is: what are the legal obligations of a private company (CPS) to deliver state grants. The court has already ruled that CPS is an organ of state for the purposes of paying social grants, which means it cannot walk away from the contract like a private party because it is fulfilling much the same function as a government department. This is because it’s delivering social grants to give effect to a constitutional right. This means that the court may order it to continue delivering grants if it remains the only body capable of doing it – even if CPS doesn’t want to continue and doesn’t make a profit.

What powers does the Constitutional Court have if it’s ignored?

The Constitutional Court depends on other branches of government to implement its orders.

But it can do the following:
• It can issue cost orders against a litigant. In this case, for example, it could order the Minister for Social Development Minister Bathabile Dlamini to pay the cost of the court case from her personal funds. This would be quite extreme but the court could make the case that she had ignored its instructions.
• In the most extreme case, it could find a person in contempt of court and can then have them jailed for being in contempt.

But ultimately the power of the court lies in the hands of citizens who can decide to punish those in power who ignore court orders and flout the law by voting for another party and electing a new government.

What’s the significance of the stand-off?

The stand-off affects the lives of millions of people. More than 17 million grants are disbursed to adults and children in the country. It is, therefore, imperative that the crisis is resolved in a way that does not threaten their livelihoods.

But it is also significant because it is testing the power of the court when confronted with political delinquency. Courts are reluctant to challenge the political branches of the state head on. But, in certain circumstances, like the present, the Constitutional Court stands to lose more by trying to avoid a confrontation. Instead, it stands to gain more credibility and legitimacy if it manages to confront the impunity of Sassa and the Minister of Social Development, and if it ultimately manages to ensure that grants are paid in a legally valid way.